The Truth About iPhone Factory Workers

Foxconn may be hiring less workers because existing workers are more willing to stay on.

The Apple iPhone has become the poster child for the problems of Chinese and American labor.

One strain of conventional wisdom goes that while rich, entitled Western elites whine and complain over trivial issues like maps and purple haze on screens, abused, exploited Chinese factory workers slave away to make those iPhones in unsafe factories and under exploitative conditions.

The iPhone represents the shafting of the Chinese worker.

Another strain of conventional wisdom goes that greedy Apple (and other companies) ships factory jobs overseas to China, where Chinese factory workers get all the jobs, and American workers are left in the unemployment line.

The iPhone represents the shafting of the American worker.

Here’s an idea. Let’s stop accepting these brain-dead caricatures, and insist on the truth about iPhones, factories and workers.

The Chinese Worker As iPhone Victim

The most recent example of the abused Chinese worker stereotype came from Saturday Night Live last weekend. If you didn’t see it, the episode featured a much-talked about skit about a fictional show called “Tech Talk,” on which tech pundits complained about first-world iPhone problems — Apple’s Maps app and the “purple haze” problem with the iPhone 5 camera. Their complaints were answered by a panel of fake Chinese Foxconn factory workers, who sarcastically contrasted the trivial issues with the iPhone with their own desperate plight — living in abusive, joyless, mind-numbingly dull assembly-line work by day, and cramped worker dorms by night.

The fake Chinese accents sounded incredibly racist to me, especially given SNL’s history: Not a single one of the 132 cast members over the show’s 37-year history has been a person of Chinese, Japanese, Korean or East-Asian descent. (I guess to SNL, Asians are only funny if white people are making fun of them with racist accents.)

The whole context for the skit was hypocritical. These rich and famous actors (and writers, producers and so on) are slamming the technology industry for exploiting Chinese factory workers. But guess what? Hollywood is an Apple shop. Nearly every show-biz type uses Apple products.

And what about the cameras, lights, set materials, computers, costume fabrics, set radios and other equipment used to make a TV show — how many of those were made in China?

The hardware behind SNL is also partly made in China, just like Apple products are. The difference is that Apple actually employs Asians, and doesn’t mock Chinese people with racist skits.

The American Worker As iPhone Victim

In the second presidential debates this week, moderator Candy Crowley asked the following question:

“iPad, the Macs, the iPhones, they are all manufactured in China, and one of the major reasons is labor is so much cheaper here. How do you convince a great American company to bring that manufacturing back here?”

Never mind that iPads and iPhones were never manufactured in the United States (it’s hard to bring something back that was never here).

Anyway, Romney said 1) we need to hammer China generally, because they’re a terrible, horrible, no-good cheater of a country; and 2) we need to make America more friendly to entrepreneurs, so all the jobs will come back.

Obama said, in a nutshell, that low-wage, low-skill jobs aren’t coming back, and that ideally we should be working on increasing high-wage, high-skill jobs.

The whole conversation was based on an assumed context that the manufacturing of iPhones and other Apple products in China is a problem that needs to be solved.

The bizarre but widely held assumption that allows such a lame question and such answers to be taken seriously on TV is that it would benefit American voters (to whom the candidates are obligated to pander) if iPhones and other Apple products were actually built in America.

The Truth About Chinese Factory Workers

The truth is that iPhones are not made in China. The component parts for iPhones are made in a great many countries, and the final assembly of those components is done in China.

The reason that iPhones are assembled in China (and almost everything else, too) is because at this stage in its rapid development, China is very, very good at assembling things in factories.

Demographically, China has a growing, America-sized chunk of its population that is middle class, upper class or super rich. And then it has a massively larger segment of the population that is rural, poor and somewhat desperate. The latter are willing to do almost anything to join the former. And that’s where factory workers come in.

High-tech factory work represents an opportunity in many cases to sacrifice a few years to save money for a brighter future.

Young Foxconn factory employees live in miserable and cramped conditions. But those conditions enable workers to squirrel away money, which is why they’re there in the first place. They hope to come out of it as young adults with thousands saved for a down payment on a house, and enough money to get married and start a better life than their parents had.

It’s a brutally tough life, not just during the factory years, but before, too. Poverty is harsh, and factory work is a way out.

That so many young people are willing to work so hard and so skillfully is what makes China the world’s factory. As bad as those factory conditions are, the alternative is no job and no future. In fact, these are the prospects for most of the world’s poor, who live in countries that do not have the economy and the workforce to attract iPhone-like factories.

It’s also important to note that nothing in China is static. The biggest problem Chinese factory managers now have is finding enough workers. In order to attract workers, they have to increasingly raise wages and improve conditions. Very soon, the labor shortage in China will make the country less attractive as a location for new factories, and more factories will be built elsewhere in hungrier markets. China will become more like the United States, with more workers doing higher-paid jobs and the economy being more about consumption than production.

Back to the presidential debates. The idea that America is the right place to build iPhones is ludicrous. It’s simply not possible to find as many workers in the United States who are willing to do that kind of work for anything approaching the low wages Chinese workers make. (Foxconn factory workers make about $2 per hour.)

The obvious end result would be $2,000 iPhones (I’m making that number up, but it would be much more expensive.) The unit shipments of iPhones at that price would shrink, and the amount of money coming into the US economy from iPhones would also shrink. US consumers would have unaffordable phones, and a smaller economy.

Of course, iPhones are just a proxy for all the products built in China. If all those products were built in the US, it would be the American consumer paying massively higher prices for everything. And proposing high prices isn’t going to get anyone elected.

The truth is that the status quo, although imperfect, is better than the assumed remedies of many critics. Firing all the Chinese workers and building iPhone factories in the United States wouldn’t help Chinese workers or America voters.

The United States gets to buy low-cost, high-quality products like the iPhone. China gets a massive boost in employment for jobs with rapidly rising wages and working conditions.

And, in any event, the made-in-China phenomenon isn’t an Apple issue. Nearly all of Apple’s competitors, and in fact nearly all consumer electronics, are assembled in China.

So the whole cultural meme that Apple and iPhone are uniquely associated with the exploitation or abandonment of either Chinese or American workers is moronic.

Yes, let’s support the improvement of wages and working conditions for Chinese workers. Yes, let’s raise employment levels in the United States. But let’s also stop parroting the untrue stereotypes that associate Apple and the iPhone with the abuse of Chinese workers or the unemployment problem in the United States. It’s misleading, inaccurate and dumb.

Deals of the Day

The SNL skit could have used slightly less loaded accents (though comics from Stephen Colbert to Dennis O’Leary to, even, Ken Jeong, use similar voices). But, really the skit was making fun of spoiled Americans who complain about trivial problems on their cellular devices, not the Chinese workers. The accents were really about how Americans view Chinese people, not really about how they speak. It’s not that “Asians are only funny if white people are making fun of them with racist accents”, it’s that white people’s myopic views of Chinese people are the joke, in this case the whiny hipsters who complain about a slight purple haze on their photos but really don’t want to have to talk about it to the Chinese people that live in their own stereotypical thoughts.

The beef about Crowley’s debate question the columnist has is really silly. No one with a brain believes Crowley was suggesting that Apple products “were ever manufactured in the United States”. She used the devices to illustrate popular products that are manufactured in China. When she asked “How do you convince a great American company to bring that manufacturing back here?”, it was about bringing manufacturing in general back to the US, not the iPad. Attacking Crowley’s question as “lame” is about as lame as it gets. Crowley asked a question, Romney flubbed it and Obama, though not quite as articulate as one would hope, essentially said, as the writer contends, that “The idea that America is the right place to build iPhones is ludicrous,” and we should be looking for other ways of bringing jobs to America.

There are probably legitimate points deep into this column, but the muddle-brained interpretation of a sketch show’s jokes and the ridiculous attack on CNN’s Candy Crowley right of the top make it quite difficult to get to any of the supposed meat later.

Steffen Jobbs

Apple is being blamed for all the ills of the labor world. That’s one bad trip.

jsnyng

Fred Armisen is part Japanese you plick. Terrible article.

Shilly Devane

the girl in the middle of the pic is a cutie

bdkennedy

Americans wanted cheap merchandise. That’s why manufacturing moved over seas in the 80’s, because it couldn’t afford to be made here. When it’s too expensive to be made in China, manufacturing will move to India, Ecuador and Spain. If you want to blame someone, blame yourself the next time you pick up a shirt, jeans, vacuum cleaner, kitchen utensils, towels, shoes, toys, etc.

Robibo

So, recently returned for a high-end tour of scenic spots in China for Mandarin speakers. Five-star hotels, private buses, sumptuous banquets, never ate the same thing twice. Question came up: how much was the tour guide paid? She coordinated all activities for 30+ folks most of whom were old, some not that mobile, organized the hotels, the transportation, the food, in one province she had to work with another guide whom she had to pay out of her income.

How much did the company pay her? Consensus was: nothing. We paid her through our “tips” which were set at 700 RMB for the 10-day tour, about $112US. How much did I pay the person who house sat for us while we were away? $30US per day, $390 total, 2439RMB. And all that person had to do was feed our cats and clean up after them.

Our tour guide works piece work. No tours through this company, she looks for tours from another company. No tours at all? She doesn’t get paid. She had nursing degree but chose this work because it paid better. How much do you figure a nurse gets paid in China?

At one rest stop an elderly lady approached our tour bus and asked if she could empty our trash cans so she could sort through our bottles for recycling. Ended up she took everything in the can. And thanked us gratefully for us letting her sort through our trash.

TinCan2012

Wow. Long article. Mike, the SNL skit was for humor. A parody. Not a Michael Moore exposé and commentary.

I thought they could have brought in some Samsung workers to ‘steal’ some laughs from Apple to make it complete.

JMO_L

It’s the name of the game and until the game is changed there will always be competing companies looking to cut corners in order to make a profit.

Ethics and morals have little or no monetary value in comparison to a companies survival.

However, It will probably change with technological unemployment through more efficient, longer lasting and more reliable automation. Foxconn is already planning to displace many workers in the next 5 years through automation. But of course that will only leave many people in China with out a meaningless exploitive job to do.

As long as there are desperate people in any country willing to tough it out, companies will exploit them for it.

Of course there is no reason there should be any desperate people anywhere, wasting their existence doing these types of jobs, but everyone seem to likes playing this game.

technochick

There’s a big detail that is missing from the article.

yes those workers make like $2 an hour. But what’s their cost of living. That wage isn’t so insanely low if it only costs them pennies an hour to live.

technochick

How about an audit of every tech company who uses Chinese labour, then you actually might see some REAL evils. Does MS, samscum or google get the same amount of attention? No. You couldn’t even tell me who manufactures for these companies or where. If you’re looking for skeletons, just don’t look at the surface.

I don’t know about the ‘real evils’ part but I do agree that the conditions in all the factories are likely very similar and some might be a lot worse than the Apple lines but no one is paying attention to the other 70 something clients the way that they do Apple. Which is due in part to Apple being the best hit fodder. HIts means ad revenue and that’s what the sites really care about. That’s why they post every little rumor about Apple products.

I believe it was Samsung that just recently got into trouble because it turns out that some of their interning students were under age but that is an exception not the norm when it comes to non Apple companies getting labor condition press

kavi

U apple supporter are so deluded, no other company demands such work load to make their products. U guys are heartless and brainless to support apple on this and blame others. U dont u make apple products at foxconn and be loyal to apple at such situations! Why dont u pay them more if u like them! Scumbags…

ocneonjohn

Mike, your article makes little sense your reasoning is clear as directions on an iphone 5, hopefully you will go to hawaii on a hiking trip while using the iphone 5 for directions and fall into a volcano, can we get someone to write about the real issues, slave labor, buggy operation due to rushed production, sueing everybody for technology that was used before iphones to stifle competition which would in the end give consumers better products, how about making the apple products in america…seriously journalism is dead…long live talentless bloggers

kavi

This author thinks thats fake chinese accent, may be he saw too many chinese third grade films to comment such things and degrade them and himself! Its them who made the product for u, the product u love, atleast u should thank them or stay away from doing such stupid stupid article and make money or life out of it. Really pathetic useless blind followers. u guys are the reason a company dont see its mistake and change itself and be arrogant. U should point their mistake so that they can change and be better.

imnu

Whilst it is true that Apple are just one of many Western firms using the likes of Foxconn, As one of Foxconn’s biggest customers, Apple’s buying power enables them to push down the prices that Foxconn would otherwise charge. Foxconn, in common with most companies faced with such low margins will try to cut costs where ever possible. Regrettably the social costs of these cuts are most visible with respect to how staff are treated.

Yes, it is Foxconn that abuses it’s staff but the likes of Apple have a shared responsibility. A firm with a well calibrated moral compass will be willing to ensure that those outside their employ but still part of the supply chain are treated fairly. Apple have gone some way to improving the working standards at Foxconn but there is still much, much more that they could do. Apple have been aware of the abuses for sometime yet have been unwilling to actively enforce the terms and conditions of their supplier contracts. Apple have more than enough clout to call Foxconn to task. Apple may need to sacrifice a small degree of their own margins so that conditions will improve but IMO that is a price worth paying.

imnu

There’s a big detail that is missing from the article.

yes those workers make like $2 an hour. But what’s their cost of living. That wage isn’t so insanely low if it only costs them pennies an hour to live.

The Foxconn issues go far beyond comparive costs of living: staff living in awful accomodation are subjected to physical and mental abuse and unfair working practices.

GEOKLV

@technochikc: are you naive or worse? Have you, ever, wondered about the quality of their “low cost” life? For crying out loud! Wake up “Alice”…

GEOKLV

Hello Mike. You have some good points, but they get lost in the wilderness of mirrors of the ever harsh fact: the exploitation of human resources, the exploitation of human beings. Ever improving the employee conditions in an eye washing manner, will never redeem the real intentions of the fully conscious will to exploit whoever lives and breathes. Your wording reads so wrong as a context. The gap of true bliss among human beings is ever growing and as long as righteousness lacks, no other arguments can be justified. Take care. George Kolovos, from Athens -Greece (we call our country Hellas and make no mistake: our European “partners” (“partners my ass”) have no clue what they are doing to us; then again, they have no true gritt; they never had).

Akula971

“The reason that iPhones are assembled in China (and almost everything else, too) is because at this stage in its rapid development, China is very, very good at assembling things in factories.”

Utter rubbish. It is all down to bottom line economics. Here is a real world example that actually happened, and started in 1999. Discussion of a future factory in China. Discussion held in headquarters in Rhode Island. Cost of labour for product- US $12 an hour, UK $7.5 an hour. Plant in St.Lucia $1 a day. Cost of Labour in China factory as percentage of product cost $almost ZERO. We pay factory owner a set fee per month, regardless of how many are made. Product is made in hundreds of thousands per week. Result? Factories in US, UK and St.Lucia closed. Now only sales and Tech support in USA.

The only way to bring manufacturing back to the “West” is through automation and robotics. Which still costs in terms of ROI/ROC. As world population increases, there is less and less demand for unskilled labour. Its a race to the bottom for you, if you are uneducated/unskilled.

Drshemming

The best article I have read on COM for a long time, very well informed on the China labour situation and spot about SNL. Well done Mike

rsdude

Mike, you missed the point on SNL, you have no other point of reference other than our existing economic model created by MBAs that choose short term profit as the only reason for any economic endeavor. The race to the bottom has a limit, we’ll reach it sooner than everyone thinks.

seaaalex

What a bunch of tripe …..

I see Mike Elgan as the Mitt Romney of CoM, saying what every he thinks the Kool Aide drinkers want to hear. In this case trying to make the case as to why they shouldn’t feel bad about the conditions of the FoxConn workers make their precious iToys.

technochick

The Foxconn issues go far beyond comparive costs of living: staff living in awful accomodation are subjected to physical and mental abuse and unfair working practices.

No one has provided proof of the ‘abuse’ claims or that workers are forced to live in those dorms or even stay if they don’t like the job.

So Apple is being blamed for folks apparently staying by choice in crappy housing and working at a heinous job. And that choice is another detail that is overlooked in order to make it sound like they are forced into labor camps and the only thing separating this from the Nazi camps is the lack of gas showers to kill them when they become useless or troublesome.

technochick

U apple supporter are so deluded, no other company demands such work load to make their products.

Sounds like someone doesn’t know about the other 70+ clients that use Foxconn. Like Dell, Microsoft, Samsung. And their lines and plants have similar work conditions etc. So yeah, other companies do demand the same to make their products. They just aren’t getting called out for it (well weren’t, that trend is changing)

extra_medium

@technochikc: are you naive or worse? Have you, ever, wondered about the quality of their “low cost” life? For crying out loud! Wake up “Alice”…

It is true though. When you think about horrible wage quotes like $2 per day or whatever you’re thinking about it in terms of how far that would get you in the US, which isn’t a real comparison. And yes, their living conditions are not the same as they are for you and me, but they are much better than they would be if they didn’t have that factory job. The sad fact that many people don’t want to accept is that the whole world can’t all live the lifestyle we are used to. The vast majority of the world does not. We tend to think that as human beings we have an inherent right to cable TV and daily Starbucks. Living in dorms as a requirement is not that strange for employees in east Asian countries either, even for high-paying white collar type jobs. Employees who work at my company’s head office in Tokyo are required to stay in a company dorm for their first 10 years of employment, unless they get married. That wouldn’t be legal here, but is absolutely normal to them.

joewin

This article implies some very basic economic principles. We all don’t like the conditions that the Chinese workers have to face but for them it’s too high of a cost to not work.

GEOKLV

@extra_medium: truly now, you present the truth of common knowledge as an argument. We are way past this. Facts are facts and there are people in many countries who merely survive. It is as if they are being kept alive in purpose so that there is always man power to support the daily over-production. The question is how long will this be going on. How much longer will atrocities be justified with punch lines like the one you quoted: “it’s normal for them”.

GEOKLV

Adopting a certain way of living is way different than the “generic” term of “lifestyle”. Even so, though, cable TV and Starbucks are not my “lifestyle” and definitely not my style of living. You know, the perception of the necessities that define the style of living in Europe is way different than that State side. You guys are more dependent from commodities than we are. An average European can fathom more the trivia of the subject being discussed than the average American. The reason is that you guys haven’t got any grave collective, social sufferings, other than your 20th century Financial Crash, whereas we in Europe have lived devastations beyond imagination. So, no doubt, the average rage of ours, is more genuine than yours when it comes to matters like this.

GEOKLV

One last thing: it is not a matter of who is being called out for, who is being blamed openly and pointed at. Of course the oust goes to any OEM who has adopted this preposterous practice and the blame equally goes to the governments of the hosting countries, who never, ever, honestly decided to set the rules of the game, fare and square to the benefit of both their citizens and their state economy.

alex503

What we in America and the rest of the west might think is slave like labor at these factories in Asia might not be the same way they think like in their cultures and countries. What taboo is here in our culture doesn’t necessarily mean its taboo in theirs. We might think these poor working conditions and low wage, long hour workdays is wrong in America and in the west, is most likely seen as normal in China and the rest of the Asia.. These are the kind of working conditions the average worker in China think is normal. We in America always seem to think if it’s wrong or not right in our culture than its defently not right in another culture and we need to stop thinking this way. Also, all of the complaints need to be made to governments of these countries instead off pushing the blame on companies such as Apple. Actually I think Apple shouldn’t be mentioned at all because just about everything we own was either made or assembled in China or other Asian countries so to put Apple on the pedistole and make it all about apple is completly unreasonale and not logical. Instead for anyone that believes that this is all wrong and feel like they need to write about it should write negatively about the governments that let this happen, not companies. Apple doesn’t run china. It doesn’t even run the factory that these employs work at. If anything apple should be commended for all of the right things they have done at the foxconn factories when not one compnay has done anything to improve working conditions or wage increses. A company can only do so much in a society where this is the standard. They have always worked like this and they will always work like this unless there is some kinda of revolution. So everybody needs to stop putting Apple at the front of all of this.

AlainFleitas

Best post ive ever read on a tech site regarding this issue, i think you hit it spot on (opinion) Its the same issue we have with hispanic individuals and our migration “problem” with out them whos going to do landscaping, Crop growing, factory working (few that we have) i live in florida and there are many factories walk into one of them and you are going to see immigrants working with visas not a single american born employee unless its the owner.. Point is no one born and raised in the US studied is going to work in factories even if you pay minimum wage because you just expect MORE.. look at landfills and fast food restaraunts.. minimum wage many immigrant workers and kids in highschool or drop outs nothing else and even then they expect greater than average pay.. leave the pollution and manufacturing off our land it does no good we cant have every city ebing a detroit (manufacturing) thats just my opinion in congruency to yours. Thank you for this article i wish it got published on every news paper in the states and even in the world.

GEOKLV

It is the easiest of ways for one to seek redemption by rebuffing a concept innocently. When it boils down to it, though, truth is that all talking and writing about cultures and taboos, the East and the West etc etc, are just punch lines of an ever sustained “play” among economies that have learned to exploit, economies that have been forced to obediently be exploited (for ever and ever) and economies that have a potential to gradually become members of the “club” of the former ones. You know what the scariest scenario of all might prove to be in the future? The possibility for an ever strong State to gradually become a dependant State. The way the US of A have patterned their way in the course of history, might, eventually turn them in a State of no true identity and a ruined economy. A giant with legs made of clay. Powerful OEMs find their way through smart and efficient ways of their logistics’ management, assignment and administration. But they remain OEMs, accountable to their shareholders and valuing their international bouquet of customers / consumers. What about the working power of your country?

bfizzzle

Ffs snl was making fun of fat lazy Americans who complain about “first world problems” yes they stereotyped the Chinese…but that’s what people of opposite cultures do. I’ve seen so many stereotypes for Americans in Chinese films/other countries/that very same sketch is stereotyping Americans as well!!

I agree the media blows this out of proportion, but just because some Foxconn employees are great-full for their opportunities to better themselves for a future as young people…doesn’t mean it’s okay for them to have such bad pay and living dorms there… Foxconn makes enough money to give a higher min wage.

This author seems a little butt hurt and let’s it affect his article/judgement.

With Chinese wages rising at about 17 percent per year and the value of the yuan continuing to increase, the gap between U.S. and Chinese wages is narrowing rapidly. Meanwhile, flexible work rules and a host of government incentives are making many states—including Mississippi, South Carolina, and Alabama—increasingly competitive as low-cost bases for supplying the U.S. market.

“All over China, wages are climbing at 15 to 20 percent a year because of the supply-and-demand imbalance for skilled labor,” said Harold L. Sirkin, a BCG senior partner. “We expect net labor costs for manufacturing in China and the U.S. to converge by around 2015. As a result of the changing economics, you’re going to see a lot more products ‘Made in the USA’ in the next five years.”

After adjustments are made to account for American workers’ relatively higher productivity, wage rates in Chinese cities such as Shanghai and Tianjin are expected to be about only 30 percent cheaper than rates in low-cost U.S. states. And since wage rates account for 20 to 30 percent of a product’s total cost, manufacturing in China will be only 10 to 15 percent cheaper than in the U.S.—even before inventory and shipping costs are considered.

>>>> After those costs are factored in,
the total cost advantage will drop to single digits or be erased entirely, Sirkin said. <<<<
[...]

Harold Staam

still dont understand if apple manufactures their phones so cheaply..and a iphone is no more expensive to manufacture then say even the 100 dollar droid phones…why they are charging so much and why cant they demand better conditions for their workers? is that because apple equally enjoys gouging their cult fanbase and starving factory workers?